There are “inverse” ETFs that let traders speculate on rising yields and lower Treasury bond prices such as ProShares UltraShort 20+ Year Treasury (NYSEArca: TBT).
In fact, TBT currently holds more than $3 billion in assets. [Bonfire of the Shorts: Leveraged Inverse Treasury ETF]
Barry Ritholtz, chief executive officer of FusionIQ, recently said he doesn’t think there is a bubble in U.S. Treasuries.
“You look at the 10-year yields around the world and the U.S. is somewhere in the middle so it’s hard to say this is a full-blown bond bubble when there’s so much more to go,” he said in a recent Bloomberg Television appearance. “The U.S. is in the middle of bond yields for industrialized nations. You could get a lot less in yield.”
In the U.S., low Treasury yields are “fair warning that the Fed is in the market impacting it,” Ritholtz added. “It’s a little bit of a warning the economy is slowing down.”
He also compared the Treasury market to the dot-com bubble in terms of investor psychology.
“If you’re honest with yourself, you have to admit bonds are going higher and yields are going lower,” Ritholtz told Bloomberg Television. “You have to admit it’s likely to end badly the way the dot-coms ended badly, and if you’re really honest you can admit you have no idea when the hell that’s going to happen.”
10-Year Treasury yields
iShares Barclays 20+ Year Treasury Bond Fund
Full disclosure: Tom Lydon’s clients own TLT.